The rise of the meme economy has turned popular internet memes into tradable assets.
Posted May 21, 2023 at 12:41 pm EST.
Internet meme culture spawned a burgeoning meme economy, where investors trade meme-powered coins, stocks, and NFTs. Read on to learn more about the meme economy and what meme investment opportunities exist in today’s market.
What is the meme economy?
The meme economy is the intersection of internet culture and economics, where memes have evolved from mere entertainment to assets traded by a dedicated fanbase of traders and investors.
It consists of stocks, cryptocurrencies and NFTs that rely on social media users on Reddit, Twitter and Telegram groups to hype them up to increase their value.
Meme coins and NFTs use the hype of popular social media memes to turn them into digital assets, with some of these assets turning into multi-million dollar market value investments. Unlike other crypto-assets, whose utility determines their value, meme coins and meme-based NFTs’ values are derived purely from the hype generated by their communities.
Traditional forms of investing rely on fundamental and technical analysis, but investor sentiment on social media platforms like Reddit and Twitter dictate the demand for meme investing.
Investing in the Meme Economy: 3 Options
The meme economy has three main investment opportunities: meme shares, meme coins, and meme-based NFTs.
Meme coins
Meme coins are cryptocurrency tokens based on internet memes. Although many people initially dismissed it as a passing fad, meme coins have remained popular.
The first meme coin was Dogecoin (DOGE), released in 2013. It remained among the top 10 meme coins available in the market. Since then, hundreds of meme coins have been released. Another popular dog-related meme coin is Shiba Inu (SHIB), which drew inspiration from Dogecoin.
The top five meme coins by market cap at today’s rates include:
Dogecoin (DOGE)
Shiba Inu (SHIB)
Floki Inu (FLOKI)
Pepecoin (PEPE)
Bean ShibaSwap (BONE)
Meme Shares
Meme shares are rising due to a sudden surge in interest on social media. A company’s performance does not necessarily affect the price of meme shares.
The short-term spikes due to social media hype can often reverse course just as quickly, making meme stocks more volatile than, say, blue-chip stocks. However, it is an investment opportunity that some people find attractive on social media platforms.
In 2021, private investors have op r/WallStreetBets subreddit rallied and started a digital revolution against hedge funds that were short selling company stocks. GameStop, which exploded in January 2021, was the first meme stock. Roaringkitty (Keith Gill) has his views on the company on Twitter, YouTube and the r/WallStreetBets subreddit in 2019. He explained how an undervalued and undervalued GameStop business could potentially lead to big profits and outlined the company’s plans to revamp its business model.
Some of the most prominent meme shares include:
AMC Entertainment Holdings (AMC)
Blackberry (BB)
GameStop (GME)
Meme-based NFTs
NFT memes refer to Internet memes that have been turned into unique digital non-flippable tokens verified on the blockchain, allowing the original creator of the meme to verify and monetize their work.
Until recently, memes were considered an aspect of social media best known for their entertainment factor and their ability to go viral. However, the NFT culture has transformed memes from the mere means of conveying humorous content to an investment opportunity. Thanks to meme-based NFTs, you can buy and sell memes and potentially earn a profit.
Pepe the Frog would be an example of a popular meme used in the NFT market, with the Rare Pepe NFT collection on Counterparty being one of the prominent Pepe the Frog NFTs in the market.
Do Memes Make Good Investments?
While the meme economy offers the potential for high returns, it carries significant risk.
Meme-based assets are highly volatile and can experience extremely sudden price swings. The only way traders and investors make money in the meme economy is by getting in and out at the right time. However, timing the entry and exit into a meme coin or meme stock is incredibly difficult.
Therefore, meme-based assets are unlikely to provide good long-term portfolio holdings because their price rallies are usually short-lived and end with sharp declines in value.
If you are looking at adding meme coins or stocks to your portfolio, research what you are investing in and understand the asset’s price drivers to determine if it is a suitable investment.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
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